IIP contracts 3.6% in February, retail inflation for March climbs up to 5.5%


Retail inflation climbed up for the month of March to 5.52% from 5.03% in February primarily led by jump in food inflation.

The more worrying numbers came on the factor output front with IIP contracting 3.6 per cent in February compared to 1.6 per cent shrinkage witnessed in January. Mining output slipped 5.5 per cent, while power generation grew by 0.1 per cent in February.

Rising Covid cases and any proposed measures that could see more local lockdowns could further jeopardise chances of recovery in the current fiscal.

Higher input cost of commodities has been a concern that has been flagged by the RBI as well. This could worsen the core inflation.

India chose to continue with the status quo on inflation targeting.


Key Numbers

The rate of price rise in the food basket accelerated to 4.94 per cent in March, as against 3.87 per cent in the preceding month

– Inflation in ‘fuel and light’ category was 4.50 per cent during the month vis-a-vis 3.53 per cent in February.
– The rise in the food basket was led by a rise in prices of oils and fats which rose a whopping 24.92 per cent in March, while that of meat and fish rose 15.09 per cent.
– Non-alcoholic beverages gained 14.41 per cent while pulses and products segment also witnessed a rise of 13.25 per cent and egg prices too rose 10.60 per cent.



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